Earlier this month, we reported with a hint of optimism that the United State and European Union may work out some sort of deal to avoid an all-out trade war. It seems this may have just been wishful thinking because, in a tweet, US President Donal Trump said "The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won't!"

Automotive News Europe reports that the European Commission is currently drawing up $20 billion worth of tariffs on US goods to be applied immediately if a deal is not reached. EU budget commissioner Guenther Oettinger said the EU would discuss mutual tariff cuts if the US lifts its metal tariffs. Neither side seems to be backing down, which is bad news for the auto industry. Prior to her meeting with President Trump, EU Trade Commissioner Cecilia Malmstrom told a Swedish newspaper that "Basically, I'm an optimistic person, but heading into this I'm moderately optimistic. But one must always try."

We've already mentioned several ways that these tariffs could negatively affect the automotive industry. Car prices will inevitably rise, parts will be more expensive, and European automakers may be forced to cut jobs. Heading into these negotiations, all signs point towards a massive trade war with Europe.